Exhibit 99.1
Navigant Consulting, Inc. Announces Second Quarter 2006 Results
CHICAGO--(BUSINESS WIRE)--July 26, 2006--Navigant Consulting, Inc.
(NYSE:NCI):
-- Quarterly revenues increased 18 percent, year over year, to $165.0
million, from $139.5 million in the second quarter of 2005. Six-month
revenues increased 21 percent, to $331.2 million, compared to $274.1
million during the first six months of 2005.
-- EBITDA for the quarter increased 17 percent to $31.0 million, from
$26.5 million in the second quarter of 2005. EBITDA for the six months
ended June 30, 2006 increased 18 percent to $61.7 million, from $52.2
million for the comparable period in 2005.
-- Earnings per share increased 8 percent to $0.26 in the 2006 second
quarter, compared to $0.24 in the second quarter of 2005. First half
2006 EPS increased to $0.51, from $0.49 in the first six months of
2005.
Navigant Consulting, Inc. (NYSE:NCI), an international consulting firm
providing dispute, investigative, operational, risk management and financial
advisory solutions to legal counsel, government agencies and companies
experiencing regulatory or structural challenges, today announced financial
results for the 2006 second quarter.
"Our solid second quarter results completed a strong first half of 2006,
which included excellent performance from our financial, insurance and
international sectors, as well as our forensic accounting and investigation
services," stated William M. Goodyear, Chairman and CEO. "In particular, our
forensic accounting expertise and recognized professionals, combined with our
strong brand, have positioned us as a leading firm to assist companies in
addressing back-dating stock option concerns. Overall, we are well positioned to
sustain our current growth throughout 2006 and achieve our previously-stated
revenue and earnings goals for the year."
Second Quarter 2006 Financial Results
Revenues for the second quarter of 2006 were $165.0 million, an 18 percent
increase compared to second quarter 2005 revenues of $139.5 million, and a
slight decrease from first quarter 2006 revenues of $166.3 million. EBITDA in
the second quarter of 2006 was $31.0 million, an increase of 17 percent from
$26.5 million for the second quarter of 2005, and up slightly from first quarter
2006 EBITDA of $30.7 million.
EBITDA as a percentage of revenues before reimbursements remained
consistent with the first quarter of 2006 at 21 percent, and was down slightly
compared to 22 percent during the second quarter of 2005. Net income per diluted
share was $0.26 in the second quarter of 2006, an 8 percent increase compared to
$0.24 per share in the comparable period in 2005, and consistent with the first
quarter of 2006.
"Net income per diluted share during the second quarter of 2006 was
impacted by higher amortization, depreciation and interest expenses, principally
due to the effects of our acquisition of London-based Precept in late March. Our
UK and other international operations have significantly benefited from this
transaction, and we are very pleased with the results of our foreign operations
despite this short-term impact to non-operating expenses," stated Mr. Goodyear.
"In addition, shares used in computing net income per diluted share increased,
quarter over quarter in 2006, by more than 1.1 million shares, principally due
to the Precept acquisition and other previous transactions."
Six-Month Financial Results
Revenues for the six months ended June 30, 2006 were $331.2 million, a 21
percent increase compared to 2005 six-month revenues of $274.1 million. EBITDA
for the six-month period of 2006 was $61.7 million, up 18 percent from $52.2
million for the comparable 2005 period. EPS for the 2006 six months was $0.51
per share, compared to $0.49 per share for the same period in 2005.
"In addition to the expansion of our international dispute and
investigations offerings, we are experiencing strong demand for our financial,
operational and risk management solutions, particularly in the financial
services and healthcare industries," stated Julie M. Howard, President and Chief
Operating Officer. "Recent engagements have focused on reengineering financial
systems and accounting processes in support of restatements, counseling clients
in setting up appropriate processes to comply with regulatory requirements, and
reviewing internal audit and other risk management functions."
Business Metrics
Average billable full time equivalent (FTE) consultant headcount for the
second quarter was 1,729, as compared to 1,733 in the first quarter, and 1,545
in the second quarter of 2005. FTE billable consultants on June 30, 2006 were
1,732, down from 1,787 at the end of the first quarter 2006, and up from 1,557
at June 30, 2005. Company-wide consultant utilization in the second quarter was
70 percent, compared to 71 percent in the first quarter of 2006 and 69 percent
in the second quarter of 2005.
Annualized revenue per consultant in the second quarter of 2006 was
$376,000, compared to $384,000 in the first quarter of 2006. Annualized
attrition was 20 percent during the second quarter of 2006, up from 18 percent
during the first quarter. Days sales outstanding as of June 30, 2006 were 83
days, compared to 81 days at the end of the 2005 second quarter. The Company
ended the second quarter with $75.7 million in bank borrowings under its $175
million unsecured, multi-bank credit facility.
"Voluntary consultant attrition at the junior consulting levels trended
seasonally upward in the second quarter as a result of increased interest in
graduate program opportunities, as well as expanding industry opportunities, but
such attrition remains constant in the single digits for our senior
professionals, " stated Ms. Howard. "We are looking forward to welcoming a
substantial complement of new campus hires over the next several months."
Company Continues to Expand Solution and Services Expertise
Navigant Consulting continued to expand its services and solution offerings
during the 2006 second quarter, hiring 19 Managing Directors and Directors.
Included in these additions was Dr. Gerold Ibler, who joined the Disputes &
Investigations practice based in Miami, further expanding the Company's
geographic reach and expertise. Dr. Ibler has managed large, complex dispute
assignments in the United States and South America. His team provides litigation
support, financial analysis, and general business consulting to corporations and
governments. The Company also expanded its Business Technology Solutions
practice with the addition of Joe Tedesco, founder and Chief Executive Officer
of Architech. He and his team expand the Company's expertise in the business
process assurance sector, helping financial services, healthcare and insurance
industry clients improve operational and revenue performance.
Webcast of the Company's Announcement of Second Quarter 2006 Results
A webcast of management's presentation of the Company's second quarter
financial results will be available on the Company's website,
www.navigantconsulting.com. To access the call, click the Investor Relations
section and select "Conference Calls." This webcast will be available until 5:00
p.m., ET, October 25, 2006.
About Navigant Consulting
Navigant Consulting, Inc. (NYSE:NCI) is a specialized independent
consulting firm providing dispute, financial, regulatory and operational
advisory services to government agencies, legal counsel and large companies
facing the challenges of uncertainty, risk, distress and significant change. The
Company focuses on industries undergoing substantial regulatory or structural
change including healthcare, energy and financial and insurance services, and on
the issues driving these transformations. "Navigant" is a service mark of
Navigant International, Inc. Navigant Consulting, Inc. (NCI) is not affiliated,
associated, or in any way connected with Navigant International, Inc. and NCI's
use of "Navigant" is made under license from Navigant International, Inc. More
information about Navigant Consulting can be found at
www.navigantconsulting.com.
Except as set forth below, statements included in this press release, which
are not historical in nature, are intended to be, and are hereby identified as,
"forward-looking statements" as defined within the Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by words
including "anticipates," "believes," "intends," "estimates," "expects" and
similar expressions. The Company cautions readers that forward-looking
statements, including without limitation, those relating to the Company's future
business prospects, revenues, working capital, liquidity, income and margins,
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those indicated in the forward-looking statements, due
to several important factors, including those identified from time to time in
the Company's reports filed with the SEC. Such risk factors include, but are not
limited to: dependence on key personnel, acquisitions consummated and
acquisitions under consideration, recruiting, attrition and the ability to
successfully integrate new consultants into the Company's practices, significant
client assignments, conflicts of interest, the ability to meet the challenges of
rapid growth and intense competition, professional liability, any significant
decline in the market value of the Company's securities that would affect its
ability to attract, retain and motivate its consultants, possible legislative
and regulatory changes, including without limitation federal class action,
asbestos and medical malpractice reform legislation, and general economic
conditions. Therefore, you should not place undue reliance on these
forward-looking statements. Please see "Risk Factors" in our Form 10-K and in
other documents we file with the Securities and Exchange Commission for a
complete description of the material risks we face. The Company undertakes no
obligation to update any of its forward-looking statements after the date of
this press release.
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)
For the three months ended
---------------------------------
June 30, March 31, June 30,
2006 2006 2005
---------------------------------
Revenues before reimbursements $147,691 $149,119 $121,622
Reimbursements 17,298 17,131 17,871
---------------------------------
Total revenues $164,989 $166,250 $139,493
Cost of services before reimbursable
expenses 84,668 87,528 71,227
Reimbursable expenses 17,298 17,131 17,871
---------------------------------
Cost of services 101,966 104,659 89,098
General and administrative expenses 32,018 30,920 23,864
---------------------------------
Earnings before interest, taxes,
depreciation and amortization
(EBITDA) 31,005 30,671 26,531
Depreciation 3,221 2,950 2,564
Amortization 2,616 2,279 1,857
---------------------------------
Operating income 25,168 25,442 22,110
Other income (expense), net (1,526) (658) (789)
---------------------------------
Income before income tax expense 23,642 24,784 21,321
Income tax expense 9,680 10,978 8,954
---------------------------------
Net income $13,962 $13,806 $12,367
=================================
Net income per diluted share $0.26 $0.26 $0.24
=================================
Shares used in computing net income
per diluted share 54,664 53,527 52,091
Percentage of revenues before reimbursements:
- ---------------------------------------------
Cost of services before reimbursable
expenses 57% 59% 59%
Reimbursable expenses 12% 11% 15%
General and administrative expenses 22% 21% 20%
EBITDA 21% 21% 22%
Operating income 17% 17% 18%
Net income 9% 9% 10%
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
For the six
months ended
----------------------
June 30, June 30,
2006 2005
----------------------
Revenues before reimbursements $296,810 $243,406
Reimbursements 34,429 30,721
----------------------
Total revenues $331,239 $274,127
Cost of services before reimbursable expenses 172,196 145,100
Reimbursable expenses 34,429 30,721
----------------------
Cost of services 206,625 175,821
General and administrative expenses 62,938 46,062
----------------------
Earnings before interest, taxes,
depreciation and amortization (EBITDA) 61,676 52,244
Depreciation 6,171 4,475
Amortization 4,895 3,317
----------------------
Operating income 50,610 44,452
Other income (expense), net (2,184) (1,114)
----------------------
Income before income tax expense 48,426 43,338
Income tax expense 20,658 18,202
----------------------
Net income $27,768 $25,136
======================
Net income per diluted share $0.51 $0.49
======================
Shares used in computing net income per
diluted share 54,096 51,666
Percentage of revenues before reimbursements:
- ---------------------------------------------
Cost of services before reimbursable expenses 58% 60%
Reimbursable expenses 12% 13%
General and administrative expenses 21% 19%
EBITDA 21% 21%
Operating income 17% 18%
Net income 9% 10%
NAVIGANT CONSULTING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED DATA
(In thousands, except DSO data)
(Unaudited)
June 30, March 31, December June 30,
Assets 2006 2006 31, 2005 2005
- ------ --------------------------------------------
Cash and cash equivalents $12,263 $18,263 $14,871 $11,118
Trade accounts receivable,
net 164,789 167,111 145,616 137,224
Prepaid and other assets 20,180 18,918 19,420 13,417
--------------------------------------------
Total current assets 197,232 204,292 179,907 161,759
Property and equipment,
net 49,565 44,864 42,320 35,369
Goodwill and intangible
assets, net 383,276 376,249 318,755 278,850
Other non-current assets,
net 2,600 2,467 1,881 363
--------------------------------------------
Total assets $632,673 $627,872 $542,863 $476,341
============================================
Liabilities and Stockholders' equity
- ------------------------------------
Bank borrowings $75,661 $94,107 $40,800 $43,800
Current liabilities 78,964 78,689 97,467 80,576
Other liabilities 28,416 28,375 20,148 8,309
Stockholders' equity 449,632 426,701 384,448 343,656
--------------------------------------------
Total liabilities and
stockholders' equity $632,673 $627,872 $542,863 $476,341
============================================
Selected Data
Days sales outstanding,
net (DSO)(a) 83 days 81 days 80 days 81 days
============================================
(a) Includes deferred revenue.
CONTACT: Navigant Consulting, Inc.
Ben W. Perks, 312-573-5630
or
Andrew J. Bosman, 312-573-5631